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Electrifying the future

Our reliance on electricity means that we expect it to be available on demand. At the same time we want to cut greenhouse gas emissions drastically. Electrifying the future is about unlocking the third generation of wind power and living the future today with smart grids.

The energy policy of Japan is at a crossroads. While the traditional energy strategy focussed securing reliable and affordable electricity supply in order to promote economic growth. But over the past decade, promoting environmental protection and fighting climate change became increasingly important.

Decarbonizing the Japanese power sector

The power sector decarbonization is a realistic choice for Japan but there are several challenges and/or risks to be addressed.

Using a diversified mix of low-carbon technologies, including renewable energy sources, CCS and nuclear energy, Japan can reach or even exceed the CO2 reduction target of 80 per cent by 2050.

Even an increase of renewables up to approximately 60 per cent, the scope for decarbonization will decrease to around 60 per cent without nuclear energy and CCS. And without nuclear energy, fossil fuel consumption may remain at a similar level as before the Fukushima incident. Simulation results indicate that reducing carbon emissions will be particularly difficult in the period to 2030. To achieve the 2030 targets, fossil fuel based power production would have to be largely based on natural gas.

Decarbonization: affordable choice, major investment challenge

Since the Fukushima incident in March 2011 Japan's imports of fossil fuels have increased significantly, in particular LNG and oil products. Record-high prices are being paid on Asian LNG markets which has led to major increase in electricity generation costs. Discussions raise the question if Japan can switch off its nuclear fleet, and what the impact is of a major shift towards renewable energy sources on future electricity prices.

Simulations show that The average costs of electricity in 2050 remains at a similar level as today. However, the necessary transition creates additional challenges. The transition to capital intensive low-carbon technologies require major investments into generation as well as transmission & distribution networks. The combined impact of increasing electricity prices and financing these investments put a significant burden on public as well as private budgets.

CO2 Emissions from Power Sector in Japan

Infrastructure needs

Demand response and de-centralised storage help to reduce the need for network expansion.

Investments into network expansion

Network expansion requires additional investments. Additional transport corridors may have substantial visual and environmental impacts. Our simulations show that it may sometimes be economically beneficial to build RES plants at less promising locations, in order to save on the cost of network infrastructure. But most important, they show that infrastructure needs are highly sensitive to the mix and regional distribution of wind and solar power.

Resource availability

Renewables will play a major role in the future electricity supply of Japan. As wind and solar resources are unevenly distributed across the country, significant volumes of transmission capacity may be required between different regions, in order to balance supply and demand. The use of onshore wind and solar-PV requires significant space and may easily conflict with other land uses and/or environmental concerns.

Investments into network expansion

The impact on future infrastructure requirements is significant, even though the total overall cost levels remain at the same level. A coordinated approach for a balanced distribution of wind and solar power can reduce the need for grid expansion. A lack of co-ordination may result in detrimental environmental impacts and additional costs.